What do your points cost?

[JimMIA]

I've been curious about calculating this for my membership but get lost in some of the numbers Has anyone seen a formula for calculating this?

It's just simple math. Here's my calculation from the first post:

I own an OKW contract which I purchased for $72 per point including closing. At the time I purchased it, I had a full 37 years remaining on the contract, so my acquisition cost was $1.95 per point. That cost remains constant throughout my ownership.

For this year, my dues are $4.97 per point, and that figure will obviously change each year as the dues change. So my total cost in 2011 is $6.92.

On the acquisition cost, I paid cash, so I only had to add my closing costs to my purchase price. If one had financed, they would have to include the actual total of the payments, closing, and any other fees to get an honest cost.

 

[Disneypapa]

I've calculated the value of my DVC ownership the same as Jim's number crunching. It has served me well and I'm happy getting $10-11 per point rent when I've got excess points.

"I own an OKW contract which I purchased for $72 per point including closing. At the time I purchased it, I had a full 37 years remaining on the contract, so my acquisition cost was $1.95 per point. That cost remains constant throughout my ownership.

For this year, my dues are $4.97 per point, and that figure will obviously change each year as the dues change. So my total cost in 2011 is $6.92."

 

[brrabit]

I've been curious about calculating this for my membership but get lost in some of the numbers Has anyone seen a formula for calculating this?

you're calculating total number of points that were purchased:
yearly points x years remaining = total # of points purchased.

you divide that by total cost at closing:
total # of points/ total closing costs= cost of each point (constant through life of contract).

and then you are adding additional cost of maintenance fees per point:
cost of each point + cost of maint fee per point = cost of point that year.

apply cost per point to vacation:
cost of point per year x points needed for vacation = cost of vacation in dollars

 

[DVCGeek]

I use the same sort of formula as the OP; purchase price per point per year + dues. However, I factor my dues by splitting the rate with 5 months calendar and 7 months next calendar to match my August UY. I maintain these records for each of my contracts, and also calculate real estate & mortgage interest tax deductions deduct those from the cost. I enjoy looking at my actual cost for various stays and looking up cash prices for other places and seeing how more they are (Especially at VGC!!! My studio there for my last trip was less than I would have paid for the cheapest room @ PP, much less anything in the Grand Cal hotel. ) I also have 3 different column groups in my reservation cost spreadsheet in case I am banking or borrowing points for a specific ressie and/or mixing points from different contracts @ 7 months or less.

It certainly makes it clear which points were the best deal; my VWL ones (purchased direct last year) are far & away my most expensive @ over $8 pp, with BLT & VGC fighting each other for cheapest since I financed BLT.

Did I ever mention I was a Geek?

 

[wideeyedwonder]

Interesting exercise that you might want to try...

Let's see, my cost per point for VGC in 2011 is $5.67. Therefore, our usual stay at the Grand Californian:

Studio: $96.40
1BR: $175.80
2BR: $260.86
3BR GV: $533.06

(We go during adventure season, sun, mon, tues).

$175.80 a night! WOW, that is an incredibly low price for the Grand, ESPECIALLY considering we are getting a 1 BR suite for that price!

The studio would only cost us $96.40 a night! AT THE GRAND!

Yes, we only go during Adventure Season, but wow, I'm really glad we bought in, as before DVC, we were making this trips ANYWAY.

LOVING it!

 

[JimMIA]

If you financed, don't forget to add the costs of the financing if you want honest numbers. (If you don't want honest numbers, just make up some story you can tell with a straight face. )

For comparison, I ran my own numbers through Timesharelending.net's payment calculator to see how much difference it would make. At Disney's lowest rate of 10.75%, my acquisition cost rose from $1.95 per point to $3.18.

So my total costs for 2011 would be:

Cash: $1.95 + $4.97 = $6.92 per point

Financed: $3.18 + $4.97 = $8.15 per point

...and those 27-point OKW one-bedrooms would have cost me $220 per night rather than $187.

 

[rillsung]

I use the same sort of formula as the OP; purchase price per point per year + dues. However, I factor my dues by splitting the rate with 5 months calendar and 7 months next calendar to match my August UY. I maintain these records for each of my contracts, and also calculate real estate & mortgage interest tax deductions deduct those from the cost. I enjoy looking at my actual cost for various stays and looking up cash prices for other places and seeing how more they are

I'll be interested to see what sort of deduction we will get, though we won't get one until next year since we just paid our first dues. We also used our original buy in because it is still money that went towards our points. So what if it's paid and gone now. That buy in money could have been spent on other things that were probably a better investment

ETA: Interestingly, we save money over the regular old All-Star room that we used to stay in for our trips down there. Course the break even for just that is like 25 years and our contract expires in 31.... LOL

 

[friends with mickey]

If you financed, don't forget to add the costs of the financing if you want honest numbers. (If you don't want honest numbers, just make up some story you can tell with a straight face. )

For comparison, I ran my own numbers through Timesharelending.net's payment calculator to see how much difference it would make. At Disney's lowest rate of 10.75%, my acquisition cost rose from $1.95 per point to $3.18.

So my total costs for 2011 would be:

Cash: $1.95 + $4.97 = $6.92 per point

Financed: $3.18 + $4.97 = $8.15 per point

...and those 27-point OKW one-bedrooms would have cost me $220 per night rather than $187.

Jim, this has been a very thought provoking thread. Since you seem to like to play with the numbers and are very good at it. I have a project for you if you have the time. We are early owners of DVC at OKW. We purchased,cash, 270 points in Feb. 92 so we have 50 years of ownership at $48 per point. I have figured our point cost based on your originial post. My question and your project should you choose to take it on is, We took advantage of extending our ownership for the additional 15 years until 2057. Paid cash again $15 per point to extend the 270 points for the 15 years. I am guessing there are two ways to value this. One using 65 years as the length of contract and figuring point cost on that basis. The other way would be to view the 15 year extension a it's own contract for 15 years of ownership at $15 per point for the 270 points. In your opinion which way should be used. Your project would be to figure out both methods to contrast and compare. Inquiring minds want to know. Have fun if you choose to report back on your findings.
Thanks, Mike

 

[JimMIA]

Jim, this has been a very thought provoking thread. Since you seem to like to play with the numbers and are very good at it. I have a project for you if you have the time. We are early owners of DVC at OKW. We purchased,cash, 270 points in Feb. 92 so we have 50 years of ownership at $48 per point. I have figured our point cost based on your originial post. My question and your project should you choose to take it on is, We took advantage of extending our ownership for the additional 15 years until 2057. Paid cash again $15 per point to extend the 270 points for the 15 years. I am guessing there are two ways to value this. One using 65 years as the length of contract and figuring point cost on that basis. The other way would be to view the 15 year extension a it's own contract for 15 years of ownership at $15 per point for the 270 points. In your opinion which way should be used. Your project would be to figure out both methods to contrast and compare. Inquiring minds want to know. Have fun if you choose to report back on your findings.
Thanks, Mike

I'll yield to the CPA's among us, but I'd be inclined to consider those two separate transactions -- one for 50 years and one for 15. If you do it that way, your initial acquisition cost was $.96 per point, and the extension was $1.00 per point.

So for this year -- part of your original 50 years -- your total per-point cost is $4.97 dues + $.96 = $5.93.

I'm sure we all envy that price!

 

[friends with mickey]

I'll yield to the CPA's among us, but I'd be inclined to consider those two separate transactions -- one for 50 years and one for 15. If you do it that way, your initial acquisition cost was $.96 per point, and the extension was $1.00 per point.

So for this year -- part of your original 50 years -- your total per-point cost is $4.97 dues + $.96 = $5.93.

I'm sure we all envy that price!

It does make it easy to smile about the vacation investment we made. We have and continue to enjoy every moment of it! Thanks for the thread.

 

[mphillips76]

Let's see, my cost per point for VGC in 2011 is $5.67. Therefore, our usual stay at the Grand Californian:

Studio: $96.40
1BR: $175.80
2BR: $260.86
3BR GV: $533.06

(We go during adventure season, sun, mon, tues).

$175.80 a night! WOW, that is an incredibly low price for the Grand, ESPECIALLY considering we are getting a 1 BR suite for that price!

The studio would only cost us $96.40 a night! AT THE GRAND!

Yes, we only go during Adventure Season, but wow, I'm really glad we bought in, as before DVC, we were making this trips ANYWAY.

LOVING it!

I'm incredibly curious how you acquired VGC for only $1.60 pp?!?!? I am guessing resale/distressed? The MFs for 2011 are $4.07. My acquisition cost for my SSR points will be $1.41 and I bought resale with banked points. I must not have done very well!

 

[Brian Noble]

If you're so inclined, you can throw in things like "opportunity costs," but for most owners those calculations are probably not worth worrying about.

I'm not so sure this is negligible, personally---the past decade of S&P returns aside.

 

[JJ721]

Great discussion Jim. Does anyone know if the historical rate of maintenance fee increases matches WDW's rack rate increases? In other words, if the cost of a cash room increases at an faster pace than the annual maintenance increases, then the DVC comparison becomes better over time. If the opposite occurs, then DVC looks worse.

 

[JimMIA]

I'm incredibly curious how you acquired VGC for only $1.60 pp?!?!? I am guessing resale/distressed? The MFs for 2011 are $4.07. My acquisition cost for my SSR points will be $1.41 and I bought resale with banked points. I must not have done very well!

I'm not sure how you would value banked points.

For your overall acquisition cost, they wouldn't count at all since they are one-time points, not every-year points.

A reasonable approach might be that they would decrease your average cost for that one year. For example, if you had 200 points with 50 banked, and your total cost was $7 per point for 2011, I guess you could multiply 200 X $7 = $1400 and then divide by 250 to get a lowered cost for that one year of $5.60.

CPA's -- a little help here! Does that make sense?

 

[JimMIA]

I'm not so sure this is negligible, personally---the past decade of S&P returns aside.

Yeah, with conservative assumptions, opportunity costs would be a few hundred bucks per year for most of us.

It's not trivial, especially if you carry it out to insane degrees like the life of a 50-year contract. But when you start adding in things like opportunity costs and valuations of banked points, you end up doing calculations ad nauseum.

And you end up losing 90% of the audience who have no idea what you're talking about, which negates the worth of the exercise.

If someone wants to jump in with that stuff, feel free -- but I don't think it would do anything but confuse readers who haven't had a graduate level finance course.

 

[JimMIA]

I'm incredibly curious how you acquired VGC for only $1.60 pp?!?!?

I was wondering about that calculation myself.

If my math is right, $1.60 per point for 50 years would be a sales price (with no other fees or charges) of $80 per point...and paying cash.

 

[kikiq]

I was wondering about that calculation myself.

If my math is right, $1.60 per point for 50 years would be a sales price (with no other fees or charges) of $80 per point...and paying cash.

I think that is possible. Some of the promotions/incentives/discounts were pretty good. We bought our VGC AFTER my youngest did her WDW CP and BEFORE my oldest became a CM. Missed both those opportunities. Also wish we had the cash to buy Aulani points before the price went up.

 

[JimMIA]

I think that is possible. Some of the promotions/incentives/discounts were pretty good. We bought our VGC AFTER my youngest did her WDW CP and BEFORE my oldest became a CM. Missed both those opportunities. Also wish we had the cash to buy Aulani points before the price went up.

You may be right, but I didn't think VCG ever sold for $80 per point regardless of the promotion. If someone bought it for that, they sure got a great price!

 

[bumbershoot]

Of course, one could argue that the initial outlay for the points is now "paid for" and shouldn't be considered since it's no longer out of pocket. Not saying it's right, just saying.

That's what I was thinking. So if you paid cash and traveled that year, that was one *expensive* vacation. All future vacations are just priced by looking at the year's dues.

If you finance, each year of vacations is what you paid that year.

 

[JimMIA]

That's what I was thinking. So if you paid cash and traveled that year, that was one *expensive* vacation. All future vacations are just priced by looking at the year's dues.

Yep...and if you spent TEN GRAND on Christmas presents...Hey, this is January -- new year! Woo-hoo!